Insight

Microsoft’s channel plans are controversial – but is it creating a blueprint for future partner programmes?

The news that continues to take the channel by storm is the retirement of the Microsoft Partner Network (MPN), which is to be replaced the Microsoft Cloud Partner Programme. Microsoft’s MPN shake-up will go into effect in October and impacts the company’s entire partner ecosystem.

Microsoft is also doing away with gold and silver partner designations. Instead, the company will identify partners as base, solution and expert partners, based on their specialisations and expertise.

To determine partners’ designations, Microsoft will measure their performance, skills and customer success with a partner capability score (PCS). Microsoft will consider certification, new customers, successful deployments and growth to determine a partner’s PCS. Partners must achieve at least 70 points out of 100. As of now, only partners will be able to see the scores, not customers.

The changes are huge news for several reasons. Microsoft has the largest partner programme in the world (470,000 partners) and is the fastest growing (300-400 join every day), according to Forrester analyst Jay McBain.

Microsoft could also be setting a precedent in how partner programmes are organised in the future. In an article on LinkedIn, Jay points to how vendors today are all “going all-in” on subscription or consumption models, including HPE GreenLake, Dell Apex, Cisco+ and Lenovo TruScale, in addition to the explosion of IaaS and SaaS replacing legacy infrastructure.

As such, “the entire technology industry should be watching the Microsoft story unfold this quarter,” he says.

However, the changes are proving controversial. One Microsoft partner in Australia has started an online petition calling the tech giant’s new partner scoring system “impossible to achieve as it’s heavily biased toward ‘new sales.’”

“We’re very, very concerned that this is going to continue and it’s going to go down the path of Microsoft wanting to ultimately be that direct relationship with the end user,” the partner told CRN US. “And it's a very, very, very scary time now to be a partner.”

The partner – known only as George – said he fears Microsoft eventually incentivising customers to work directly with the vendor by sticking partners with higher prices and less favorable contract offers.

“What we’re finding is Microsoft is leaning now toward locking people in for longer periods of time and also setting the bar essentially higher for the MSP so that our goals become almost unattainable,” he said.

He also feels that Microsoft has taken advantage of a stressful time for partners – from learning new technology to a hiring crunch to dealing with COVID-19 and adapting to remote work – to roll out changes in its partner programme, from New Commerce Experience and premium on month-to-month commitments to the new partner capability score and partner designation system.

Nevertheless, Jay maintains that it is “the 70% of partners who have not crossed the chasm into cloud subscription models are the most upset.”

He says that “pulling the center of gravity from initial purchase to long term retention, adoption, stickiness, and enrichment benefits both parties long term. CX and PX come together here.”

Despite partner concerns, Microsoft will be pushing ahead with the changes, and might be laying the path for other vendors to do the same. What do you think? Is this what the partner programme of the future will look like? Email us at christine@purechannels.com and let us know!

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